Thursday, 13 November 2008

US President-elect Barack Obama should reaffirm his support for globalisation and resist attempts at "China-bashing", the Asia chief of US bank Morgan Stanley said on Thursday.

Stephen Roach said there is a risk that anti-China legislation would be introduced in the US Congress if the incoming American leader fails to stop those calling for a more inward-looking trade policy. "Trade policy was a big issue in the election and, toward the end of the general election campaign, Senator Obama did make some hostile statement towards China as being a currency manipulator," Roach said.

Speaking to journalists on the sidelines of a Morgan Stanley Asia Pacific conference, Roach said he was hopeful that, after he takes office in January, Obama's trade policy will differ from his campaign statements.

"One of the things I'm very hopeful of is that as president, Barack Obama reaffirms his support for globalisation, says no to China-bashing, says no to other types of trade frictions that continue to resonate a lot in the halls of the US Congress," he said.

"If he can't resist that -- and there is certainly a risk of that in this environment -- then you do have to worry about the possibility of anti-China trade legislation being introduced," he added.

"That will have a pretty negative impact on China and the rest of this region. I hope that's not the case." With the United States, the world's biggest economy, struggling in a global financial crisis there are fears the US could respond by imposing tougher trade rules.

As Illinois senator, Obama opposed a free trade deal with South Korea, fearful of giving South Korean carmakers unfettered access to US markets. He also resisted a proposed trade pact with Colombia. Obama also insisted he would work to renegotiate the North American Free Trade Accord (NAFTA) with Mexico and Canada, backing opposition to the deal from American labour unions.

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